FTSE 100 preview: Muted start ahead after lacklustre leads

FTSE 100 preview: Muted start ahead after lacklustre leads
Written by:
Tsveta van Son
16th July 2019

The FTSE 100 looks set to open little changed this morning, amid uninspiring leads from the US and Asia, with investors staying on the sidelines at the start of the earnings season. On the corporate front, Burberry (LON:BRBY) is scheduled to update investors on its first-quarter performance this morning.

FTSE 100 seen flat

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IG’s opening calls suggest that the Footsie will start trading 0.05 percent lower at 7,528 points. In the US, stocks posted small gains last night, with investors awaiting major corporate results later in the week. CNBC reports that the outlook for the earnings season is bleak, with analysts expecting S&P 500 earnings to have fallen by 3% in the second quarter, according to FactSet data. Asian shares meanwhile have climbed cautiously higher this morning.

“Clearly the biggest risk to the most recent rally is the earnings season,” Ryan Felsman, senior economist at CommSec in Sydney, commented, as quoted by Reuters.

In the UK, the FTSE 100 rose in the previous session, gaining 25.75 points to end trading 0.34 percent higher at 7,531.72, with investors digesting the latest data out of China.

“Bad news = good news. Relatively lacklustre growth in China has the market baying for more stimulus,” Markets.com analyst Neil Wilson wrote, as quoted by Reuters.

Tuesday’s agenda

Today’s macroeconomic calendar includes UK’s unemployment data, due out at 09:30 BST, to be followed by Germany’s ZEW economic sentiment index for July at 10:00 BST. In the US, the nation’s retail sales data for June will be announced at 13:30 BST.

On the corporate front, results are due out by Burberry, along with credit checker Experian (LON:EXPN) and Anglo-Australian miner Rio Tinto (LON:RIO). Building materials group CRH (LON:CRH) meanwhile has announced the divestment of its Europe Distribution business for an enterprise value  of €1.64 billion payable in cash.

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